A bid to turn around sugarcane’s bitter past in Telangana Premium

The Telangana government is making concerted efforts to revive sugarcane cultivation across the vast agricultural lands of Nizamabad, Medak, and Karimnagar districts

For P. Srinivas Reddy, sugarcane is now just a memory. At 55, the farmer from Narayankhed in erstwhile Medak district of Telangana has adapted to the changing times, cultivating cotton and pulses on his 25-acre rainfed land. With groundwater depletion rendering irrigation impossible, he no longer battles the uncertainties that once came with sugarcane farming. But the shift wasn’t by choice; it was a necessity.

Two decades ago, sugarcane was his mainstay, grown on seven acres. Back then, Telangana’s sugar industry thrived, supporting over a dozen major mills and around 125 ‘khandsari’ units. At its heart was Nizam Sugars Limited (NSL), once the State’s second-largest PSU employer, with crushing units spread across the region. But as monsoons turned erratic in the early 1980s, groundwater reserves took a hit. The decline in sugar recovery rates — from 12% to 9% — pushed mills into losses. Rising labour costs, the lack of mechanisation and inconsistent government support further crippled the sector, forcing farmers like Reddy to look elsewhere.

Even NSL, once an industry giant, could not withstand the collapse. Its roots traced back to 1937 when Raja Dhanraj Giriji Narsing Giriji established Asia’s largest vacuum pan sugar factory near Bodhan (Shakkar Nagar). The Nizam’s government later took control of it through the Industrial Trust Fund, and after Hyderabad State merged with India in 1948, the factory continued operating. In 1958, two years after the formation of Andhra Pradesh, it became a State-run public sector undertaking (PSU).

Over the years, NSL expanded aggressively, adding seven units — one each in coastal Andhra and Rayalaseema, and the rest in Telangana — by 1976-77. At its peak, it was Telangana’s second-largest PSU employer after Allwyn, boasting three distilleries and a crushing capacity of nearly 38,000 TCD (tonnes crushed per day), supported by cane plantations spread over 1.62 lakh acres.

Yet today, all that remains of the once-flourishing sugarcane industry is a pale shadow of its former self. With improved irrigation facilities making other crops more viable, farmers switched to paddy, cotton, and maize — crops backed by MSP. As sugar mills shut down, the sweet crop that once symbolised prosperity turned into a bitter chapter in Telangana’s agricultural history.

As sugar mills struggled, privatisation was seen as a possible lifeline. But instead of revival, it only accelerated NSL’s downfall.

As losses spiralled out of control, the then united Andhra Pradesh government decided to privatise seven NSL units, following the earlier sell-off of the Hindupur unit in Rayalaseema (1998) and Bobbili in coastal Andhra (2002). An implementation secretariat was set up to oversee the process.